MIDEAST STOCKS-Strong global tone may buoy markets

Reuters Staff

2 Min Read

DUBAI, March 2 (Reuters) - Stock markets in the Gulf may be buoyed by a strong tone among global bourses on Thursday, while Dubai builder Arabtec could attract interest after it released an investor presentation on its recovery plan.

MSCI’s broadest index of Asia-Pacific shares outside Japan is up 0.6 percent after the Dow Jones Industrial Average blasted through the 21,000-point mark for the first time on Wednesday, gaining 1.5 percent.

Gulf markets have lagged international bourses in recent weeks but the strong global environment may still have an impact on Thursday.

Futures prices now show an 80 percent chance of a U.S. Federal reserve interest rate hike in March; this may be seen as positive for banks in the Gulf, as their net interest margins could expand, and negative for real estate developers.

Arabtec, which in mid-February posted a net loss of about 2.95 billion dirhams ($803 million), released a presentation outlining a three-phase recovery plan - stabilisation in 2017, preparation in 2018 and growth in 2019 - and predicting its core Gulf markets would rebound in coming years.

The presentation does not include detailed financial data, but some investors may be pleased by the extent of the statement.

Index compiler FTSE Russell released details of the second half of Qatar’s transition to Secondary Emerging Market status, which will occur on March 19.

The weights of most Qatari stocks in FTSE’s index will double, which Arqaam Capital calculates will bring passive fund inflows of about $345 million. However, Aamal’s weight will only increase to 28 percent from 20 percent because of shareholding limits, FTSE said, while Qatari Investors Group’s weighting will not change because it failed a headroom test. (Reporting by Andrew Torchia)